Fourth Quarter 2018: Net sales increased 20% to $72.4 billion in the fourth quarter, compared with $60.5 billion in fourth quarter 2017. Excluding the $801 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 21% compared with fourth quarter 2017. Operating income increased to $3.8 billion in the fourth quarter, compared with operating income of $2.1 billion in fourth quarter 2017. Net income increased to $3.0 billion in the fourth quarter, or $6.04 per diluted share, compared with net income of $1.9 billion, or $3.75 per diluted share, in fourth quarter 2017. The fourth quarter 2017 included a provisional tax benefit for the impact of the U.S. Tax Cuts and Jobs Act of 2017 of approximately $789 million.

Full Year 2018: Net sales increased 31% to $232.9 billion, compared with $177.9 billion in 2017. Excluding the $1.3 billion favorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 30% compared with 2017. Operating income increased to $12.4 billion, compared with operating income of $4.1 billion in 2017. Net income increased to $10.1 billion, or $20.14 per diluted share, compared with net income of $3.0 billion, or $6.15 per diluted share, in 2017. “Alexa was very busy during her holiday season. Echo Dot was the best-selling item across all products on Amazon globally, and customers purchased millions more devices from the Echo family compared to last year,” said Jeff Bezos, Amazon founder and CEO. “The number of research scientists working on Alexa has more than doubled in the past year, and the results of the team’s hard work are clear. In 2018, we improved Alexa’s ability to understand requests and answer questions by more than 20% through advances in machine learning, we added billions of facts making Alexa more knowledgeable than ever, developers doubled the number of Alexa skills to over 80,000, and customers spoke to Alexa tens of billions more times in 2018 compared to 2017. We’re energized by and grateful for the response, and you can count on us to keep working hard to bring even more invention to customers.”

UPDATE: Fourth Quarter and Full Year 2018 Operational and Other Financial Highlights

Daily active users (DAUs) – DAUs were 1.52 billion on average for December 2018, an increase of 9% year-over-year.

Monthly active users (MAUs) – MAUs were 2.32 billion as of December 31, 2018, an increase of 9% year-over-year.

Mobile advertising revenue – Mobile advertising revenue represented approximately 93% of advertising revenue for the fourth quarter of 2018, up from approximately 89% of advertising revenue in the fourth quarter of 2017.

Capital expenditures – Capital expenditures were $4.37 billion and $13.92 billion for the fourth quarter and full year 2018, respectively.

Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $41.11 billion at the end of the fourth quarter of 2018.

Headcount – Headcount was 35,587 as of December 31, 2018, an increase of 42% year-over-year.

In addition, the company estimates that around 2.7 billion people now use Facebook, Instagram, WhatsApp, or Messenger (the "Family" of services) each month, and more than 2 billion people use at least one of the Family of services every day on average.

From the original post:
Facebook's fourth quarter and full year 2018 financial results will be released after market close on Wednesday, January 30, 2019. Facebook will host a conference call to discuss its results at 2 p.m. PT / 5 p.m. ET the same day. The live webcast of the call can be accessed at the Facebook Investor Relations website at investor.fb.com, along with the company's earnings press release, financial tables, and slide presentation. Following the call, a replay will be available at the same website. A telephonic replay will be available for one week following the conference call at 404.537.3406 or 855.859.2056, Conference ID: 6461349. Transcripts of conference calls with publishing equity research analysts held on January 30, 2019 will also be posted to the investor.fb.com website.

Apple today announced financial results for its fiscal 2019 first quarter ended December 29, 2018. The Company posted quarterly revenue of $84.3 billion, a decline of 5 percent from the year-ago quarter, and quarterly earnings per diluted share of $4.18, up 7.5 percent. International sales accounted for 62 percent of the quarter’s revenue.

Revenue from iPhone® declined 15 percent from the prior year, while total revenue from all other products and services grew 19 percent. Services revenue reached an all-time high of $10.9 billion, up 19 percent over the prior year. Revenue from Mac® and Wearables, Home and Accessories also reached all-time highs, growing 9 percent and 33 percent, respectively, and revenue from iPad® grew 17 percent.

“While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide,” said Tim Cook, Apple’s CEO. “Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments. That’s a great testament to the satisfaction and loyalty of our customers, and it’s driving our Services business to new records thanks to our large and fast-growing ecosystem.”

“We generated very strong operating cash flow of $26.7 billion during the December quarter and set an all-time EPS record of $4.18,” said Luca Maestri, Apple’s CFO. “We returned over $13 billion to our investors during the quarter through dividends and share repurchases. Our net cash balance was $130 billion at the end of the quarter, and we continue to target a net cash neutral position over time.”

Apple is providing the following guidance for its fiscal 2019 second

revenue between $55 billion and $59

gross margin between 37 percent and 38 percent

operating expenses between $8.5 billion and $8.6 billion

other income/(expense) of $300 million

tax rate of approximately 17 percent

Apple’s board of directors has declared a cash dividend of $0.73 per share of the Company’s common stock. The dividend is payable on February 14, 2019 to shareholders of record as of the close of business on February 11, 2019.

Apple remains one of the biggest and most powerful companies in the world, and iPhone sales are its most important metric. So when iPhone sales slump in China, it means billions of dollars lost. And it rattles markets across the world. These are the three big factors dragging down Apple in China. CNBC video above published Jan 9, 2019.

"[D]ue to the ubiquitousness of WeChat, Apple's iOS holds a less prominent place in the Chinese user's mindspace - the iPhone retention rate is only 50%"--seekingalpha.com.

Huawei smartphone sales leap as Apple iPhone sales stall

Huawei is eyeing top spot in the smartphone market after overtaking Apple in 2018. iPhone's China shipments fell 22% in fourth quarter last year. Financial Times (ft.com) video above published Jan 25, 2019.
Tweets by AppleSupport

2019-01-28

No teachers. No fees, and no qualifications needed. Codam is an unorthodox coding college designed to address educational inequality, and a shortage of tech professionals. The FT’s Harriet Agnew goes to Amsterdam to meet Codam’s founder and funder, one of the brains behind TomTom, Corinne Vigreux, and discover a new way of learning. Financial Times (ft.com) video above published Jan 15, 2019.

In preparation for the fourteenth Annual Meeting of the Internet Governance Forum (IGF) which will be hosted by the Government of Germany in Berlin from 25 to 29 Nov 2019, thefirst face-to-face 2019 Open ConsultationsandMAG meeting will take place on 28-30 January 2019 at the Palais des Nations in Geneva, Switzerland. A Call for Issues has been published and all submissions were due by Thursday 24 January 2019--among the proposed issues submitted in the Category: "Evolution of Internet Governance"--#37 "A middle ground between the vested-interest capture of multi-stakeholderism and government capture of multi-lateralism is badly needed. How can IGF stimulate such innovation?" with the following comment:

Jan 22 chat (pdf): Milton Mueller (NCSG): (08:16) Will [Attorney] Ruth [Boardman] (Bird & Bird) be on these calls? Kurt Pritz: (08:17) @Milton - generally no but can be called in as required ... and we will refer questions that come out of each meeting to her.

Jan 22 transcript (pdf) p.35: Diane Plaut (IPC): "... I think that it really – a starting point that’s an absolute necessity is to get ICANN to define its role. We all have been presented with the ICANN Legal memo [pdf] with regard to the roles (unintelligible) or position on joint controllership relationship or a sole controllership ..." [link added]

Email to EPDP Mail List Jan 23, 2019: "I am really mystified, having taken the time to examine the records and mailing list of the TSG-Access-RD which Benedict mentioned, that we were not briefed on the meetings, the group, and the questions they are settling, many of which depend on policy decisions. I am also mystified as to why this appointed group of technical experts hasfunding to their Washington meetings and to Kobe [ICANN64}, and our group does not have funding for Kobe. Further, it looks as ifthey need some legal advice. I recommend they consider adding Ruth [Boardman, Bird & Bird] as an independent outside counsel, and add a policy person to think up the questions to ask her."--Stephanie Perrin, EPDP member & NCSG Chair (links and emphasis added).

"The [ICANN Technical Study] group will base its work on the following assumptions ... 3.ICANN is the sole party that authorizes access to non-public registration data in the gTLD space."--TSG revised draft charter, supra.

TSG mail list: "... As noted on Tuesday's call, I think it's important to remember that ICANN org's understanding is that whatever solutionICANNproposes for third-party access to redacted registration data is unlikely to eliminate liability for the contracted parties. ICANN org's goal is to explore ways to diminish that liability to the extent possible. To that end, the TSG is tasked with developing a technical solution that ICANN org may test against the law to determine if a unified access model is possible. The memo on independent controllership was drafted by ICANN org as part of the EPDP's discussion on processing activities. The EPDP has not yet tackled third-party access to gTLD registration data. They anticipate discussing that during Phase II ..."--Eleeza Agopian, ICANN Strategic Planning and Initiatives Sr. Manager. [link added]

More than 95,000 complaints have been filed with EU Data Protection Authorities (DPAs) since the General Data Protection Regulation (GDPR) took effect May 25, 2018, the European Commission said Friday.

Apple, Amazon, Netflix, Spotify, and YouTube, are among eight tech firms (pdf) named in a complaint filed in Austria by non-profit organization noyb (noyb.eu), based upon failure to comply with the European Union’s General Data Protection Regulation (GDPR).

Googleto appeal €50 million GDPR fine imposed by France'sData Protection Authority (DPA)CNIL(cnil.fr), which "observed two types of breaches of the GDPR"--violation of the obligations of transparency and information and violation of the obligation to have a legal basis for ads personalization processing.

Ireland's Data Protection Commission (DPC) is "currently investigating Twitter’s compliance with its obligations under the GDPR to implement technical and organisational measures to ensure the safety and safeguarding of the personal data it processes. This investigation commenced in November 2018 following receipt of a number of breach notifications from the company since the introduction of the GDPR. The DPC has this week opened a new statutory inquiry into the latest data breach it received from Twitter on 8 January, 2019. This inquiry will examine a discreet issue relating to Twitter’s compliance with Article 33 of the GDPR"--dataprotection.ie.

Businesses that invest in data privacy see benefits when they do experience a breach--a new Cisco study (pdf) of 3,200 security professionals in 18 countries found that preparing for the EU's General Data Protection Regulation (GDPR) lessened the impact of data breaches.

a.Expired domains do not help for rankings: "Google understands when domains change ownership so it won't necessarily rank for the queries it used to rank pre change of ownership. So if the sole purpose of buying a domain is to get search traffic from the old domain, I would suggest against doing so since there's no benefit."--Aaseesh from the Google Webmaster Trends Analysts team.

"The situation appears to be a DNS (domain name system) corruption, one method for China to block websites through its intricate censoring system called the Great Firewall. When a user enters a domain name associated with a banned IP address, the Firewall will corrupt the connection to stop the page from loading."--techcrunch.com.

UPDATE: according to a report in reuters.com, the Bing outage in China was due to a technical error, not censors' block.

As of December, 2019, Bing only had a 2% share of China’s search market compared with 70% share for Baidu. The Chinese version of Bing had been the only major foreign search engine accessible from within China, and Microsoft had censored its search results in accordance with Chinese government policy.Google is blocked in China, but nevertheless still has about 90% global market share for internet search. Google lags behind in Russia, where homegrown competitor Yandex has 55% of the market due to superior Russian language search capabilities and willingness to comply with Russia's restrictive laws. See Why Is Google Struggling In Russia? Yandex | YouTube.com.

Investing Notes:China:"the problem is ... debt is no longer having the same kind of effect ... the amount of debt needed to produce a given impact on GDP ["credit intensity"] more than tripled ... In the next downturn ... Beijing may not be able to borrow its way out of the hole"--mauldineconomics.com. Bloomberg.com: "China’s Xi Warns Party of ‘Serious Dangers’ as Risks Mount."

Eurozone, EU & Brexit: the eurois sttll a real worry for all of Europe--cnn.com. The euro's unhappy 20th birthday--thehill.com. "... the Eurozone ... is far from being a happy place ... one cannot rule out another economic crisis. I say this as the UK exports goods and services worth €209 Billion ($237 Billion) to the EU and imports from the EU trade worth €342 Billion ($388 Billion). The UK accounts for 16.8% of all EU exports. That is a too big a hit for a bloc the size of the EU to take without a problem rippling through the economy ..."--Forbes.com.

Bullish: Guggenheim Partners Global Chief Investment Officer Scott Minerd says worries about a global recession are inflated, and pessimism expressed by political and business leaders at the World Economic Forum in Davos is a “valuable contra-indicator” for investors, making him bullish.

Sweet Dreams: "go with a low-cost, one- to four-year average maturity U.S. Treasury fund ... Vanguard Short-Term Federal fund [VSGBX]. I don’t invest in anything with a maturity of five years or longer. I’m concerned about U.S. budget problems leading to a potentially much steeper yield curve, so I want to stay relatively short term. The Vanguard fund is a laddered fund. As bonds mature, the money is reinvested. You will compound your gains if interest rates go higher. Those are my picks: If you buy gold, and own the iShares MSCI Emerging Markets ETF (hedged with the S&P 500 for bearish investors), and buy this bond fund, you’ll sleep pleasantly at night"--Jeffrey Gundlach.

4) ICYMI Tech News:

Amazon's AWS is the "internet’s largest cloud provider, generating over $17 billion in revenue last year. Though Amazon makes much more in gross sales—over $100 billion—from its retail business, if you scrutinize its earnings reports, you’ll see that the majority of its profits come from AWS. Tech is where the money is, baby."--gizmodo.com

Microsoft'srecently signed major enterprise cloud deals "scream of retail and healthcare companies wanting a solution not involving Amazon controlled AWS"--seekingalpha.com.

Googlesays it will appeal its recent $57 million fine for breaching Europe's strict new privacy rules known as GDPR.

Apple in China: "due to the ubiquitousness of WeChat, Apple's iOS holds a less prominent place in the Chinese user's mindspace - the iPhone retention rate is only 50%"--seekingalpha.com.

5G: global mobile data traffic expected to grow eight times by the end of 2023 ... with first commercial 5G networks and devices launched 2018. Ericsson estimates the number of subscriptions reaching one and a half billion by the end of 2024."--ericsson.com/en/5g

2019-01-25

Uber Eats is an online food ordering and delivery platform launched by Uber (uber.com) in 2014, based in San Francisco, California. Users can order food from participating restaurants via the Uber Eats website ubereats.com or app.Tweets by UberEats

2019-01-24

It's no secret that Starbucks has been struggling to get U.S. customers to frequent its cafes more often. While sales have been positive, the number of customer visits continues to stagnate.
Same-store sales, a key metric in the restaurant industry, have dwindled over the last 12 months as competition heated up and customers were uninspired by some of Starbucks' limited-time offerings. While comparable-store sales exceeded expectations in the quarter that ended Sept. 30, rising 4 percent, much of that was due Starbucks charging more for its lattes.

In its 47-year history, Starbucks has transformed from a single coffee bean store in Seattle to a 30,000 cafe international coffee power house. But massive expansion hasn't come without growing pains. Under the leadership of Howard Schultz, Starbucks pursued a strategy of aggressive expansion in the late '80s and early '90s.

Overexpansion of Starbucks Stores
By the time Starbucks went public in 1992, it had 165 stores, and four years later, Starbucks opened its 1,000th location, including international cafes in Japan and Singapore. Just two years later, Starbucks opened its 2,000th cafe. While unit expansion helped boost sales throughout the last two decades — Starbucks has had positive same-store sales growth since 2010 — it has spread itself too thin. With more than 14,000 locations in the United States alone today, Starbucks is regrouping and rethinking its expansion, and is expected to close 150 underperforming locations in 2019, three times the amount it typically does.

Changing consumer preferences are also an issue which CEO Kevin Johnson has addressed with investors. In 2015, sales of Frappuccinos were 14 percent of Starbucks revenue. However, in the first half of 2018, Frappucino sales were down 3 percent — and accounted for only about 11 percent of the company's revenue. Frappuccino sales were also hurt by a lack of innovation said analysts. CNBC video above published Jan 10, 2019.

Starbucks Q1 Fiscal Year 2019 EarningsLIVE Webcast January 24, 2019 5:00 pm EST.Listen to the webcast-- a replay of the webcast will be available on the Starbucks Investor Relations website (until end of day Friday, February 22, 2019) -- investor.starbucks.com (investor relations).

Q1 Comparable Store Sales Up 4% Globally Driven by 4% Growth in the U.S.

China Comparable Store Sales Up 1% in Q1 and Total China Stores Up 18% Versus Prior Year

GAAP EPS of $0.61; Non-GAAP EPS of $0.75, Up 15% Year-Over-Year Including Income Tax Favorability

Active Starbucks RewardsTM Membership in the U.S. Increases 14% Year-Over-Year to 16.3 Million

Questions re: Q1 FY19 Starbucks $SBUX: top line revenue hit the consensus mark of $6.5B? Shift of prior FY19 guidance for global comparable store sales growth near the lower end of the 3% to 5% range? How is the UberEats pilot progressing? Impact in China from slowing GDP, trade tensions, and competitor Luckin Coffee?

2019-01-23

Freethink.com video above published Dec 28, 2018: "We take addresses for granted - but billions of people and places don’t have them, and it’s a big problem. Whether it’s voting, disaster relief, or pinpointing a spot on festival grounds, not having an address makes things that should be simple difficult. Enter Chris Sheldrick, who coordinated events in the music industry where he was frustrated by address-related problems. He created What3Words, a method of dividing the entire world into 3 meter-by-3 meter squares using a set of three common words as addresses. It’s being used everywhere from Mongolia to South Africa for everything from emergency services to pizza delivery. In this interview, Chris Sheldrick describes the problem, how he came up with the idea, and how you can find ways to change the world on your own."

what3words is the simplest way to talk about location. It has divided the world into a grid of 3m x 3m squares, each with a unique address made from 3 words. Now people can refer to any precise location – a delivery entrance, a picnic spot or a drone landing point – using three simple words. what3words is helping improve businesses around the world, and paving the way for social and economic progress in developing nations. It can be used via the free mobile app or online map. what3words can also be built into any other app, platform or website, with just a few lines of code.--what3words.com

Many places lack a system for addresses. What3Words’ solution is to give every spot a three-word designation. Featured in the Sept. 3, 2018 issue of Bloomberg Businessweek.

2019-01-21

Wall Street Journal (wsj.com) video above published Jan 9, 2019: Tech giants like Amazon and Apple are expanding their businesses to include electronic health records -- which contain data on diagnoses, prescriptions and other medical information. That’s creating both opportunities and spurring privacy and data protection concerns. Here’s what to know."Healthcare truly is the next big opportunity for Apple"--SeekingAlpha.com.xealth is a Seattle based digital health startup (domains: xealth.com and xealth.io).Tweets by xealthinc

UPDATES: • 20 Jan 2019 email from ICANN Staff Support Team who prepared a first draft (pdf) of the Final Report for the EPDP working group to review.• 21 Jan 2019 email from EPDP Chair: "Attached is a status of our work. The first is an overall statusoutline all issues [embed below]; the second is a tabular listing of the status of each Purpose and Recommendation [embed below]. Please read both docs to get a complete picture. We will follow up with guides for each of the upcoming meetings."Overall status :

Tabular listing:

Highlights of the EPDP Toronto F2F:1. First Day (Wednesday, 16 Jan 2019, transcript pp. 22-23) What Are We Doing? (Stephanie Perrin is NCSG Chair):

3. Second Day (Thursday, 17 Jan 2019, transcript (pdf) pp. 2-20): discussion late Thursday afternoon (starts at 1:48:00 on the Adobe recording) involving counsel for ICANN and EPDP members about ICANN's memo (pdf) re: independent controller versus joint controller. Related: Belgium's Data Protection Authority (DPA) published guidance on issues of "controller" and "processor"--Lexology.com:"despite the DPA’s guidelines, there is no simple answer as to who qualifies as controller or processor and in many instances it will be hard to make that call."

Editor's note: Why is this EPDP so dysfunctional? In part, the answer lies in the same seven factors that lead to stupidity:

"People think stupidity is the opposite of intelligence. In fact, stupidity is the cost of intelligence operating in a complex environment. It’s almost inevitable ... seven factors that lead to stupidity ... being outside of your circle of competence, stress, rushing or urgency, fixation on an outcome, information overload, being in a group where social cohesion comes into play, and being in the presence of an 'authority.'"--Farnam Street | fs.blog.

Unfortunately, all seven factors were present in Toronto at the EPDP F2F.More about the Toronto EPDP F2F on last week'sNews Review.

Editor's noteUPDATE 24 Jan 2019: ICANN appears to be in violation of the ICANN Bylawsby not publishing any of the documents filed by Afilias in the IRP:since27 November 2018 without any notice of what documents are being wholly redacted:

(u) All IRP Panel proceedings shall be conducted on the record, and documents filed in connection with IRP Panel proceedings shall be posted on the Website, except for settlement negotiation or other proceedings that could materially and unduly harm participants if conducted publicly. The Rules of Procedure, and all Claims, petitions, and decisions shall promptly be posted on the Website when they become available. Each IRP Panel may, in its discretion, grant a party's request to keep certain information confidential, such as trade secrets, but only if such confidentiality does not materially interfere with the transparency of the IRP proceeding.--ICANN Bylaws Art. 4, Section 4.3(u).

a. Gibraltar issues .eu domain guidance--chronicle.gi: "In the scenario that we exit the EU without a deal, you should check whether you continue to meet the eligibility criteria set out in Article 4(2)(b) of Regulation (EC) No 733/2002 to hold a .eu Top Level Domain."

b. Domain names' pricesbeginning to be abusive?--lowendtalk.com.
See also productforums.google.com: "I want to stop paying for a custom domain name. What will happen to my blog if I do that?" Answer: go back to the free blogspot domain, also you can disconnect the custom domain at any time.

d. IP address location"we know it’s junk"--gizmodo.com: "the proper approach is to go to the internet service provider that operates the IP address and get it to tell you who was using it at the time it did the bad thing. This usually requires a subpoena or court order ..."e. Delete All Your Apps: Los Angeles accuses Weather Channel app of deceptive data collection-- thehill.com 4 Jan 2019. [Editor's note: many mobile phone native apps havedata and security issues. What we are seeing now is just the tip of the iceberg.] "Every moment of every day, mobile phone apps collect detailed location data. And it's for sale"--nytimes.com.

c. India's top court seeks government response on plans to snoop on citizens' computers--reuters.com.d. Why Facebook, Google, et al, Wanted To Kill Off RSS--corporate control and "ownership" of all "news" and "information"--own "everything"--

Google Reader is just the latest casualty of the war that Facebook started, seemingly accidentally: the battle to own everything. While Google did technically “own” Reader and could make some use of the huge amount of news and attention data flowing through it, it conflicted with their far more important Google+ strategy: they need everyone reading and sharing everything through Google+ so they can compete with Facebook for ad-targeting data, ad dollars, growth, and relevance.--Marco Ament, 2013as quoted in motherboard.vice.com.